What does CAC mean?
Customer Acquisition Cost - the total cost of acquiring a new customer, including marketing, advertising, sales efforts, and any other expenses directly related to converting a prospect into a paying customer.
Indie context: The metric that determines if your business is sustainable. Divide your total marketing spend by new customers acquired. If your CAC is higher than your LTV (Lifetime Value), you're burning money. Aim for LTV to be at least 3x your CAC.
CAC
Customer Acquisition Cost - the total cost of acquiring a new customer, including marketing, advertising, sales efforts, and any other expenses directly related to converting a prospect into a paying customer.
💡 The metric that determines if your business is sustainable. Divide your total marketing spend by new customers acquired. If your CAC is higher than your LTV (Lifetime Value), you're burning money. Aim for LTV to be at least 3x your CAC.
IndieWait.com/indie-dictionary
Related Terms
LTV
Lifetime Value - the total revenue you can expect from a single customer over the entire duration of their relationship with your product.
MRR
Monthly Recurring Revenue - the predictable revenue a SaaS business generates each month from active subscriptions.
ARR
Annual Recurring Revenue - the yearly value of recurring subscription revenue. Calculated by multiplying MRR by 12.
Churn
The rate at which customers cancel their subscriptions or stop using your product. Usually expressed as a monthly or annual percentage.
Explore more terms and phrases
Check out the full indie developer dictionary to master all the essential slang.
Browse all terms